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Voluntary coverage under ESI - Scope of Writ
Human Resources » Industrial Law & Discipline

Chrm Message From: nandhan Total Posts: 9 Join Date: 03/08/2010
Rank: Beginner Post Date: 04/05/2016 18:32:05 Points: 45 Location: India

 Dear Sir/s

The monthly wages of few of the contract workers stands exceeded Rs.15000/per month and come out of the ambit of ESI Act. I solicit you learnt opinion as to the scope of filing a Writ before the Hon'ble High Court seeking a direction to ESI Corporation to extend voluntary coverage under the ESI Scheme for these contract workers premising on the following grounds:

·        That the ESI Act, being a welfare legislation envisaging comprehensive Social Security Scheme, is socially protecting the 'employees'. The basic objective of the statute is to provide certain benefits in the event of sickness, maternity and employment injury to workmen (and their dependents) employed in Factories and other establishments come under its ambit.

·        That once a factory or an Establishment is covered under the Act, it continues to be covered notwithstanding the fact that the number of persons/ coverable employees employed therein at any time falls below the required limit or there is a change in the manufacturing activity.

·        That an employee who crosses the ceiling limit prescribed by the Central Government (Rs.15000/) in any month at any time after commencement of the contribution period, he/she would continue to be an employee till the end of that contribution period. Though there is a ceiling limit of wages for coverage of an employee, there is no ceiling limit in the definition of wages for payment of contribution. Hence, contribution is payable on the total wages without any ceiling limit.

·        That there is no rationality or justification in denying coverage thereby depriving the benefits envisaged under the Act to the employees merely because of their wages getting exceeded by even 1 rupee from the existing ceiling fixed at Rs. 15000 under the definition of employee under Section 9 of the ESI Act.

·        That the deprivation of the benefits to the workmen on the above sole ground (wages) defeats the very objective of a welfare statute.

·        That the clause stipulating quantum of wages for coverage is not a prohibitory clause, rather, only a restrictive clause.

·        That in the instant case, neither the employer nor the employee have any objection whatsoever as to the voluntary coverage of contract workers whose wages exceeded Rs. 15000.

·        That it is high time to enhance the the wage ceiling for coverage, which now stands at Rs.15000/, taking in to consideration of the present day reality, though the matter is still pending with the Central Govt.

·        That the term 'exempted employee' defined under Sec 10 of the ESI Act merely denotes an employee who is not liable to pay the employee contributions. The exemption limit with effect from 01.07.2011 is Rs. 100/per day. However, employer's contribution is payable on these wages.

·        That there is an inherent provision in the Employees Provident Fund and Miscellaneous Provision Act 1942, which is also a welfare statute, for the voluntary coverage of employees whose basic wages exceeded the prescribed limit by moving a joint application by the employer and employee.

·        That the Govt. of India have already initiated a move to expand the coverage of beneficiaries under the ESI Act even extending the benefits under the statute to autorikshaw drivers with an annual contribution of Rs. 3000 from their side.

Reference on Case laws, if any, in the matter, would be highly appreciated.


Nandhakumar K A

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